Debt interest payments hit £5m an hour

By DAILY MAIL REPORTER
Updated: 07:04 EST, 19 November 2010

Britain plunged deeper into the red last month as the cost of servicing the national debt hit a staggering £5million an hour.

Official figures showed the Government borrowed another £10.3billion in October – a record for the month and more than the £10.1billion deficit racked up in the same period last year.

Tax receipts were up but the rise was wiped out by a surge in spending on benefit payouts and interest on the nation’s debts. Interest payments hit £3.9billion last month alone – £500million more than in October last year.

Disappointing number: The UK Government borrowed another £10.3billion last month

The Treasury said the disappointing numbers reinforced the case for the harsh austerity measures outlined by George Osborne.

It came as the Organisation for Economic Co-operation and Development said the recovery will be slower than expected because of the ‘substantial but necessary’ spending cuts and tax rises.

It forecast growth of 1.7 per cent next year – well below the 2.5 per cent it predicted in May and the 2.3 per cent expected by the Treasury.

It blamed the ‘subdued’ level of growth in 2011 on ‘headwinds’ stemming from the Chancellor’s plans to tackle the record deficit left by Labour.

But it said the decisive action would support the economy in the long-term and forecast growth of 2 per cent for 2012.

‘The substantial but necessary fiscal tightening and weak real income growth create headwinds and growth is projected to remain subuded in 2011,’ the OECD said in its Economic Outlook.

The Chancellor is still on course to cut the annual deficit from £155billion last year to £149billion this time around. The Government has borrowed £81.6billion in the first seven months of the fiscal year – £5.9billion less than in the same period a year ago.